The Biofuels Train To Nowhere: No Government Schemes That Cannot Be Scammed


Going nowhere but earning government cash

Just now catching up with this. CBC News reported a couple of weeks back that a mysterious train loaded with biofuels had crossed back and forth 24 times between Canada and the U.S. in 2010 without ever unloading. The biofuels train to nowhere was apparently part of a scheme to exploit a loophole in U.S. regulations requiring oil companies to blend 1 billion gallons of biodiesel into fuels each year. According to CBC News:

Bioversel Trading hired CN Rail to import tanker loads of biodiesel to the U.S. to generate RINs (renewable identification numbers), which are valuable in the U.S. because of a "greening" policy regulating the petroleum industry. The EPA's "Renewable Fuel Standard" mandate that oil companies bring a certain amount of renewable fuel to market, quotas they can achieve through blending biofuel with fossil fuel or by purchasing RINs as offsets.

Because RINs can be generated through import, the 12 trainloads that crossed into Michigan would have contained enough biodiesel to create close to 12 million RINs. In the summer of 2010, biodiesel RINs were selling for 50 cents each, but the price soon fluctuated to more than $1 per credit.

Once "imported" to a company capable of generating RINs, ownership of the biodiesel was transferred to Bioversel's American partner company, Verdeo, and then exported back to Canada. RINs must be "retired" once the fuel is exported from the U.S., but Bioversel says Verdeo retired ethanol RINs, worth pennies, instead of the more valuable biodiesel RINs. Bioversel claims this was all perfectly legal.

It may well be perfectly legal, but it certainly did nothing to advance the environmental protection goals at which the federal government program supposedly aims. The energy news website,, notes that the EPA has cracked down on other bad actors who have scammed the $2 billion per year market for biodiesel RIN credits. It always seems that there are no government schemes that cannot be scammed.

Hat tip to David Sterner.

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  1. The funny part is that the train was going nowhere before it even left the station.

    Biofuels are a crock.

    1. They usually are. I can imagine certain high energy compounds for niche applications that you would only be able to make using biology.

      Of course, you wouldn’t need gov’t subsidies to make that profitable, naturally.

      1. Of course not, so we should probably spend a few billion more anyways.

        Maybe next time someone will unload these gallons of leftist desperation somewhere before it ends up wasting more fuel than it’s carrying.

  2. When you are giving “free stuff”, its a lot easier to be scammed. Also, when a scam is being scammed, like this, is it still a scam?

    1. Meta-scam, or scams all the way down?

      1. Didn’t your mother teach you to not pick at your scams?

  3. Drivin’ that train…

  4. And the world is a better place than it would have been if they had actually made the extra 24 trainloads of biodiesel and moved it to the USA.

  5. Was this a low emission train engine?

  6. I want in on this deal!

  7. I’d want in on it too, but I don’t think you can cash your RIN credits at the ATM in a strip bar.

    1. You sell your credits to a company that needs the credits.

  8. That actualyl makes a lot of sense dude. Wow.

  9. Cross the border with a trunk full of alcohol and they give you shit. Cross the border with a train full of alcohol and they give you millions of dollars.

  10. Reminds me of this awful, awful commercial I heard on the radio today for the American Planning Association. It ended with the tagline “Because great communities don’t just happen by accident.” (barf!)

    Anyway, their website contains one of the most inane FAQ pages imaginable, in particular this paragraph which may set the record for most uses of the word “plan”:

    1. What Do Planners Do?
      Professional planners help create a broad vision for the community. They also research, design, and develop programs; lead public processes; effect social change; perform technical analyses; manage; and educate. Some planners focus on just some of these roles, such as transportation planning, but most will work at many kinds of planning throughout their careers.

      The basic element is the creation of a plan. Planners develop a plan through analysis of data and identification of goals for the community or the project. Planners help the community and its various groups identify their goals and form a particular vision.

      In the creation of a plan, planners identify the strategies by which the community can reach its goals and vision. Planners are also responsible for the implementation or enforcement of many of the strategies, often coordinating the work of many groups of people. It is important to recognize that a plan can take a variety of forms including: policy recommendations, community action plans, comprehensive plans, neighborhood plans, regulatory and incentive strategies, or historic preservation plans.

      Other examples of plans include: redevelopment plans, smart growth strategies, economic development strategic plans, site plans, and disaster preparedness plans.

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